County home sales still weak

Ventura County home sales were disappointing last month but not nearly as bad as some economists anticipated.

Some real estate professionals are optimistic that last week's nudge — a half-point interest rate cut from the Federal Reserve — coupled with sellers' growing realism will end buyer paralysis and spur transactions.

Ventura County's year-over-year sales plunged 18.3 percent in August, but edged up 0.2 percent from July, the California Association of Realtors reported Tuesday. It was marked change from previous years because summer months are typically busy.

Mark Schniepp, director of the California Forecast Project in Goleta, was surprised that sales hadn't dropped more. He expects sales to take a bigger hit in September.

The median price of existing single-family detached homes was $669,870 in August, down 5.8 percent from $710,910 a year ago. It also declined 1.9 percent from $682,930 in July. The median is the midpoint, where half the homes sold for more and half for less.

This was a pronounced price decline, with CAR's report signaling the biggest year-over-year price drop of the year, Schniepp said.

He attributed the sharp decline in median price to the fact that borrowers had difficulty getting jumbo loans in August, putting the emphasis on more lower-priced properties.

Bill Watkins said the declines in median price and sales were not as bad as he was expecting, considering the layoff announcements at Amgen Inc. and Countrywide Financial Corp., the county's two largest private employers.

"This is a little bit of good news," said Watkins, executive director of the UC Santa Barbara Economic Forecast Project. "It's terrible when a 5.8 percent decline in price is good news."

Schniepp forecasts that prices will remain flat or fall a little lower.

By 2008, he anticipates that they will be down 10 to 15 percent from the fall 2005 peak.

He projects September's median price to decline to about $650,000 to $670,000.

"If we're not at the bottom, we're very close," he said.

Some real estate professionals anticipate an uptick in transactions over the next few months, saying the combination of falling housing prices and the Federal Reserve's rate cut has encouraged buyers to return to the market.

Brian Troop, president of Troop Real Estate in Simi Valley, said sales over the past few months have been at record lows.

Credit crunch shock wave'

"It was like when the Northridge earthquake hit and nobody bought anything — they were just paralyzed," Troop said. "Business came to a standstill for a couple of months, but we came back from it, just as we're now coming out of the shock wave of the credit crunch."

Sales at Troop were definitely down in August compared with a year ago, largely because of weakened consumer confidence and the credit crisis felt by lenders across the country, Troop said.

He added that confidence has increased this month and sellers have brought their prices down to where they should be.

"I would believe September is more of a transitional month," Troop said.

"We are seeing a lot of activity because the federal government is taking some positive steps to shore up the credit crunch."

While the Fed's move was heartening and boosted the stock market, it hasn't influenced the housing market that much because it didn't do much to the jumbo rates, Schniepp said.

Cut designed to boost growth

The Fed last week reduced its target for the federal funds rate, the interest that banks charge each other, from 5.25 percent to 4.75 percent.

The action, which does not directly affect mortgage rates, was designed to boost economic growth by lowering borrowing costs for millions of consumers and businesses.

California's median price was $588,970 in August, up 2 percent from a year ago, while sales declined 27.8 percent.

Across the state, median prices fell in nine regions, including Santa Barbara County, which dropped to $833,330, down 0.2 percent from a year ago. Los Angeles County's median price was $605,300, up 2.6 percent from a year ago.

Nationally, sales of existing homes fell for a sixth straight month in August, pushing activity to the lowest point in five years. Sales dropped by 4.3 percent in August, compared to July.

The nationwide median price of an existing home edged up slightly in August to $224,500, an increase of 0.2 percent from August 2006. It marked the first year-over-year price increase after a record 12 straight months of declining prices.

In the Conejo Valley, there were 121 single-family home sales last month, compared with 142 in July and 173 a year ago, said Allen Reznick, president of the Conejo Valley Association of Realtors.

The median sales price was $768,939 in August, down from $879,716 a year ago.

Joe Virnig, president of the Ventura County Coastal Association of Realtors, said people are waiting for a shift, but there are definitely buyers out there looking.

"There is a lot of pent-up demand," said Virnig, a broker with ReMax Gold Coast Realty in Ventura. "Open houses are well-attended."

Pricing more realistic

In the city of Ventura, there were 76 sales in August, compared with 57 in July and 72 in August 2006, Virnig said. Ventura's median list price for August was $545,000, and the median selling price was $530,000.

"There's not a huge difference between list price and sales price," Virnig said. It's an indication that sellers are pricing their homes more realistically.

In Ventura County, the unsold inventory index last month was 2.2 months, compared with 11.8 months statewide, according to CAR.